From the 1960s through the 1970s, Swedish brands Saab and Volvo; German brand Volkswagen were the automobiles most favored by professors and students – people of intelligence that is – people weary of the junk coming out of Detroit. Best of all, most models were moderately priced. They were “sensible” cars – a lot like Birkenstocks – the sensible shoes.
But once these brands caught on in the US, a combination of rising production costs and corporate greed began to put these serviceable vehicles beyond the pocket books of most. Following the lead of the US automakers, Volvo, Saab and VW upped the size and the price tags on most of their models.
As a student in the 1960s, I had a Volvo and the accompanying footwear by Birkenstocks. It was a tank of a car but people bought them because of that – tank-type safety and European manufacturing reliability. According to police on the scene, one of my last “tank” type models saved my Mother’s life when we were hit from the passenger side. Only the accelerated rate if the price increases and what I perceived as a downturn in product quality took me away from Volvo.
In 2000, Saab, manufactured by an aircraft company [Swedecar], sold out to GM. Nine years later, 14 December , sold the rights to manufacture older Saab models (half its assets] to Chinese auto manufacturer BAIC. Still manufactured in Sweden at the time of the sale, workers at the Saab plant worry since word is out that GM will sell the newer technology to the Chinese as well. [NY Times]
Ford bought Volvo for $6.45 billion in 1999. In the 2nd quarter 2010, Ford hopes to close the sale of the brand for $1.8 billion with Geely Automotive of China. Geely is China’s largest private automobile company and has plans to use the Volvo technology to develop energy-saving cars. [Reuters]
The Japanese outstripped the US auto in manufacturing safe, reliable, reasonably priced cars without buying US technology but furthered their success and goodwill with the US by moving some manufacturing to the US. However, China has a pattern of preferring to manufacture in their homeland. They cut research and testing time through buying up automobile companies where the technology is already in place to build safe, reliable cars. With the older models being made in China, the cars will become more competitive via a good price point.
The future of the auto industry is taking shape with movement of focus to China, India, Korea and other sites. Like all trends in manufacturing, the parts, distribution and the financing may soon come from disparate continents. It is a very changed world and what is sensible and reliable in an auto is in flux now as well. We don’t know a thing about which technology will break from the field and lead us toward energy independence. But how long before the technology is reliable; how much will it all cost?
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